Switching Financial Adviser: How It Works and What It Costs

How to switch financial adviser, and what it costs

You can leave a financial adviser at any time: the rules require a right to cancel an ongoing service without penalty, and your investments can usually stay where they are while a new adviser takes over. The main costs of switching are the new firm’s initial charge, if it makes one, and any exit or transfer charges on the products themselves, which are separate from the adviser.

01Leaving your current adviser

Cancel in writing. Tell the firm you are ending the ongoing service. You do not have to give a reason (COBS 6.1A.22R).
Stop the fee at source. If the fee is taken from your investments (facilitated), tell each platform or provider to stop paying it.
Ask for your records. Your latest suitability report, the last review, and your annual costs and charges statement. They save the new adviser time, which can save you money.

02Your investments do not have to move

Your pensions and investments are held by a provider or platform, not by the adviser. A new adviser can often take over the "servicing rights" on your existing accounts. Whether you then move anything is a separate decision. It should be based on cost and suitability, and it should be in the new adviser's suitability report with the reasons.

03What switching can cost

Cost	Who charges it	What to ask
New adviser's initial charge	The new firm	Is there a charge to take over existing investments, and how much in pounds?
Exit or transfer charges	The product or platform	Is there any charge to leave, and would moving lose a guarantee or bonus?
Dealing costs and time out of the market	The platform, if you sell	Can it move "in specie", without selling?

Some older pensions carry valuable guarantees, such as a guaranteed annuity rate, that are lost on transfer. Check before moving anything.

04Choosing the new firm

Check the new firm on the FCA Register, get its fees in pounds, and ask exactly what its ongoing service includes. Our check an adviser toolkit lists the checks and the questions for a first meeting.

05Common questions

Do I have to pay my old adviser to leave?

No. You cannot be charged a penalty for cancelling an ongoing service, though you may owe for service already provided.

Will my new adviser move all my investments?

Not necessarily. A new adviser can usually take over your existing accounts. Any recommendation to move should come with the reasons and costs in writing.

Sources and further reading

About this guide: figures are labelled with their source and date and describe the market, not any firm; illustrations are arithmetic, not forecasts or quotes. This is general education, not regulated advice or a personal recommendation, and FinancialAdvisor.co.uk is not authorised or regulated by the Financial Conduct Authority. Spotted an error? Report it and we will correct it.